I was at a big box store not long ago looking to replace the phone at my home-office. I had had some trouble finding the exact set of features I wanted, but when I did and got to the checkout, the cashier informed me that for phones, they had a strict no-return policy once it had been opened. This makes sense for something like music or software, but for a telephone? I needed to be sure it could do what I needed, and the only way to find that out was to purchase it and try. But with no return options, I couldn’t justify taking the risk. I decided to not purchase and look elsewhere.
When it comes to improving online conversion rates, there is always a lot of talk around shipping policies. For some reason, there is much less discussion about return policies. But these can be just as important a factor in affecting a conversion rate positively or negatively, more multiple reasons.
Building Trust – One of the biggest challenges of almost every online store is achieving the same level of trust in the customer as a similar brick & mortar store. If I am at a physical store, I can pick up the product, see exactly what color it is, determine if the material feels of good quality, assess if the parts are connected with quality or if it looks like it will break soon, etc. When I’m looking at a similar product online, I can go with a two dimensional picture, and hope that the description is accurate. I know there is a much greater risk that when I receive it, it will not be quite what I was expecting or hoping for. So it’s important to most online shoppers that the Return Policy at the site they’re purchasing from is liberal enough to build the trust that the store will meet their needs even if the product does not.
Convenience – Convenience is one of the main reasons people shop more online. They don’t have to get in the car and fight crowds. They can compare multiple providers quickly and easily. So to leverage that, you want to make all facets of their shopping experience at your site convenient. If they look at your return policy and see a bunch of conditions, or a bunch of steps they have to go through if they don’t like what they receive, that feeling of convenience is lost. And they’re a click or two away from your competitors. Now days, we come to expect returns for any reason at any brick & mortar store. If that’s not the case at your online store, you’re probably hurting your sales.
Repeat Business – It’s no secret that repeat customers convert at a higher rate than first time visitors. So we want to do all we can to enable and encourage repeat business. If you have a customer that has to make a return and the process is simple and painless for them, their trust in you will shoot way up. They’ll be much more likely to purchase from you (and probably less likely to need to return) in the future. And the vast majority of your customers will not need to make a return. But if they have had a positive shopping experience with you and combine that with seeing an easy returns policy, again their perception of you will be even greater, and they’ll be more likely to return as well.
So now that you are on board with the importance of your online returns policy, here are six tips to consider when developing (or changing) yours.
- Adopt as liberal a return policy as possible. Start with a “no questions asked” philosophy. Then determine how long you will allow your customer to hold the product before asking for a return. Zappos.com touts a 365 day policy. You might not be able to do that, but be sure to give your customer time to try the product and make a decision.
- Make the return process as simple as possible for your customer. Do they need to request an RMA number? Must they return the item in its original packaging? Hurdles like this can turn customers off. If they see a four, five, or six step process they must go through to just send something back, they’re less likely to make the purchase. Worse, if they don’t find out about this until after their purchase, they’ll never come back and they’ll tell their friends.
- Word your policy so that it sounds friendly, not threatening. When you use words & phrases such as “we reserve the right”, “you must”, “we will refuse”, etc., your potential customers will be intimidated. Let them know that you want them to be happy, not scared.
- Promote your return policy prominently on all pages, and within the shopping cart. Visitors may want to review the return policy at any point in their session, so make it readily available from the same spot on every page. That can be in the footer, or in a Customer Service section of the main navigation area, or wherever you think your customers will find it easily. And add additional links right in the body of the shopping cart, as close to the grand total of the order as possible. Seeing prominent links to the return policy tells customers you’re not worried about the quality of products they’ll be receiving.
- Minimize any financial costs to the customer. Look at refunding not only the cost of the product, but also the shipping costs that you had charged on the order. Consider paying for the customer’s cost to ship it back to you. Many, many online stores refund both of these costs. Do you charge a restocking fee? That can be a killer. These amount to punitive charges that will turn off most customers. Does it really cost you 25% to put an item back into inventory?
- Audit your competitors. Every industry is different. Different target segments have different sets of parameters that might make some of the above suggestions impossible. See what your competitors are doing and then match them or do better. And if your return policy is the most customer-friendly in the industry, promote that heavily on your web site.
Try these suggestions or come up with some improvements of your own and then implement them. Please let me know in the Comments what effects they have on your conversion.
